APA (NASDAQ:APA) & Tourmaline Oil (OTCMKTS:TRMLF) Critical Analysis

APA (NASDAQ:APA) and Tourmaline Oil (OTCMKTS:TRMLF) are both large-cap energy companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Institutional and Insider Ownership

83.0% of APA shares are held by institutional investors. Comparatively, 1.8% of Tourmaline Oil shares are held by institutional investors. 0.7% of APA shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares APA and Tourmaline Oil’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
APA	19.48%	24.84%	10.15%
Tourmaline Oil	6.05%	9.05%	6.25%

Volatility and Risk

APA has a beta of 0.37, indicating that its stock price is 63% less volatile than the S&P 500. Comparatively, Tourmaline Oil has a beta of -0.24, indicating that its stock price is 124% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for APA and Tourmaline Oil, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
APA	4	17	10	0	2.19
Tourmaline Oil	0	6	4	1	2.55

APA presently has a consensus target price of $42.76, suggesting a potential downside of 3.98%. Tourmaline Oil has a consensus target price of $65.00, suggesting a potential upside of 44.12%. Given Tourmaline Oil’s stronger consensus rating and higher probable upside, analysts plainly believe Tourmaline Oil is more favorable than APA.

Dividends

APA pays an annual dividend of $1.00 per share and has a dividend yield of 2.2%. Tourmaline Oil pays an annual dividend of $1.45 per share and has a dividend yield of 3.2%. APA pays out 21.1% of its earnings in the form of a dividend. Tourmaline Oil pays out 201.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Valuation and Earnings

This table compares APA and Tourmaline Oil”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
APA	$9.22 billion	1.69	$1.43 billion	$4.73	9.41
Tourmaline Oil	$4.72 billion	3.72	$187.99 million	$0.72	62.64

APA has higher revenue and earnings than Tourmaline Oil. APA is trading at a lower price-to-earnings ratio than Tourmaline Oil, indicating that it is currently the more affordable of the two stocks.

Summary

APA beats Tourmaline Oil on 11 of the 17 factors compared between the two stocks.

About APA

APA Corporation, an independent energy company, explores for, develops, and produces natural gas, crude oil, and natural gas liquids. It has oil and gas operations in the United States, Egypt, and North Sea. The company also has exploration and appraisal activities in Suriname, as well as holds interests in projects located in Uruguay and internationally. APA Corporation was incorporated in 1954 and is headquartered in Houston, Texas.

About Tourmaline Oil

Tourmaline Oil Corp. explores for and develops oil and natural gas properties in the Western Canadian Sedimentary Basin. The company holds interests in properties located in the Alberta Deep Basin, Northeast British Columbia Montney, and the Peace River High Triassic oil complex. Tourmaline Oil Corp. was incorporated in 2008 and is headquartered in Calgary, Canada.